Auditor’s Corner

Follow These Guidelines When Establishing a Trust Account

By Emmet R. Wood

Director, Audits and Investigations

 

If you are the broker-in-charge of a real estate office and need to open a bank account to deposit trust funds, the bank account:

·         Must be opened in an FDIC insured bank or savings and loan association in North Carolina

·         Must be a demand account.

·         May be an interest-bearing bank account if written authorization is obtained from the persons for whom the trust funds are being held.

·         Cannot be a security, including a government bond.

·         May be a certificate of deposit if the CD is insured and the money can be withdrawn on demand without any penalty that would reduce the principal amount.

·         Must be designated as a “Trust Account” or “Escrow Account” on the checks, deposit tickets and bank statement.

·         May contain a maximum of $100 of personal funds (or such other amount as may be required) to cover bank charges.

·         May not contain trust funds on property owned by the broker.

For more information on opening trust accounts, please see the Trust Account Guidelines, Section IV under TRUST ACCOUNTS.